Caryn G. Schechtman

SEC and Other Regulatory Investigations

• Lead counsel for investment advisor and two principals in an SEC investigation and enforcement action alleging a three-year scheme to fraudulently inflate the value of the Fund’s hard to value assets in excess of $400 million and alleging 13 discrete material misrepresentations to investors.  On summary judgment, Judge Daniels in the SDNY wrote a 79 page decision adopting defendants’ arguments and dismissing the SEC’s valuation fraud claims and 11 of the 13 material misrepresentations on the merits. The SEC subsequently voluntarily dismissed with prejudice the sliver of the remainder of the Complaint.  Defendants were awarded sanctions against the SEC and the case was referred to in the press as “an embarrassing SEC loss in court.”
• Lead counsel for investment advisor in an SEC investigation involving allegations of insider trading concerning a PIPE transaction.  SEC took no action against investment advisor.
• Lead counsel for former bond trader in DOJ investigation.  The client was not indicted even though the case resulted in multiple indictments.
• Lead counsel for CEO of a public company in an SEC enforcement action involving allegations of fraud.  SEC subsequently voluntarily dismissed action as to our client. 
• Lead counsel for trader at investment advisor in DOJ investigation alleging manipulative trading.  The criminal complaint was dismissed without indictment.  
• Lead counsel for US listed foreign company in an SEC investigation alleging Section 5 violations.
• Lead counsel for former Big Four executive involving allegations of insider trading.
• Lead counsel for investment advisor in an ongoing SEC enforcement action alleging cherry-picking.
• Lead counsel for a medical device manufacturer and key officers in SEC investigation involving allegations of fraudulent recognition of revenue.  SEC took no action against the company or its principals and issued close-out letter.
• Lead counsel for UK broker dealer in ongoing SEC enforcement action allegation violations of 15(a)
• Lead counsel for financial institution in an SEC investigation involving allegations of material misrepresentations to investors.  SEC took no action against the financial institution and issued close-out letter.
• Counsel for large retail broker dealer in state attorney general investments for multiple states arising out of the failure of the auction rate securities market.
  
   

Investigations

• Significant experience leading internal and independent investigations on behalf of audit committees and special committees of public companies.  Investigation experience includes US-based and extensive experience with China-based public companies. Examples include:
• Led cross-border investigation on behalf of audit committee of U.S. listed Chinese company involving allegations of bribery and fraudulent business practices
• Led cross-border investigation on behalf of audit committee of U.S. listed Chinese company involving allegations of theft and securities fraud
• Led investigation on behalf of special committee of U.S. public company involving allegations of securities fraud centered on fraudulent revenue recognition 
• Led internal investigation on behalf of U.S. listed public company involving allegations of short swing trading

Class Action, Derivative Action and other Private Party Litigation 

• Lead counsel for a Florida biologic manufacturer in a securities class action in the Middle District of Florida and related derivative actions.  The class action complaint was dismissed in its entirety on our motion to dismiss.  An amended complaint was filed and it was also dismissed in its entirety with prejudice on our motion to dismiss. Two derivative actions were voluntarily dismissed after receipt of our motion to dismiss, before the opposition was due to be filed. The class action plaintiff appealed the dismissal of the securities class action to the Eleventh Circuit. The Eleventh Circuit affirmed the dismissal with prejudice on all grounds.
• Lead counsel for underwriters in a class action in the Southern District of New York.  The class action complaint was dismissed in its entirety with prejudice on our motion to dismiss.  
• Lead counsel for underwriters in a  class action in the Southern District of New York involving a US listed Chinese company.  The class action complaint was dismissed in its entirety with prejudice on our motion to dismiss.
• Lead counsel for underwriters in a class action in the Southern District of New York involving a US listed Chinese company.  The class action complaint was dismissed in its entirety as to the underwriters on our motion to dismiss.  
• Lead counsel for underwriter in a complaint alleging securities fraud and tortious interference.  Complaint was dismissed in its entirety against underwriter on our motion for summary judgment.
• First in Texas and then in New York federal court, defense of a US-based investment advisor, its principals and an offshore investment fund in a purported death spiral securities fraud action against claims of unlawful market manipulation and fraudulent misrepresentations arising out of a securities purchase agreement for future priced securities. Based on a motion to dismiss for misuse of the discovery process, the court dismissed the plaintiffs' $300 million securities fraud complaint with prejudice. The court subsequently granted summary judgment in favor of the offshore investment fund and awarded our client $5 million plus attorneys fees.
• First in Colorado and then in New York federal court and state court, defense of a US-based investment advisor, its principals and an offshore investment fund in a purported death spiral securities fraud action against claims of unlawful market manipulation and fraudulent misrepresentations arising out of a securities purchase agreement for future priced securities. On our motion for summary judgment, the court dismissed the plaintiffs' $300 million securities fraud complaint with prejudice. The court subsequently granted summary judgment in favor of the offshore investment fund.
• First in Texas and then in New York federal court, defense of an investment advisor and its principals in a purported death spiral securities fraud action against claims of unlawful market manipulation and fraudulent misrepresentations arising out of a securities purchase agreement for future priced securities. Based on the strength of the motion for judgment on the pleadings, and in order to avoid Rule 11 sanctions, plaintiffs voluntarily agreed to dismiss their complaint with prejudice and without any payment or consideration.
• In Nevada federal court, defense of an investment advisor based in the US, its principals and certain offshore investment funds, in a purported death spiral securities fraud action against claims of unlawful market manipulation and fraudulent misrepresentation arising out of a securities purchase agreement for future priced securities. The plaintiff voluntarily dismissed its action, and we obtained a judgment of $1 million for our client on its own claims against the plaintiff.
• In Colorado state court, defense of broker-dealers in a purported death spiral securities fraud action against claims of unlawful market manipulation and fraudulent misrepresentations arising out of a securities purchase agreement for future priced securities. Our clients' motion to dismiss the complaint was granted in its entirety and with prejudice.
• In Texas, defense of a number of national broker-dealers including market makers in a purported naked shorting state securities fraud action against such alleged claims as unlawful market manipulation, RICO and common law fraud. After removing the action from Texas state to Texas federal court based on a federal preemption argument, we successfully moved to dismiss the case.
• In Nevada federal court, representation of multiple national broker-dealers including a market maker in a naked shorting securities fraud action against such claims as unlawful market manipulation, RICO and common law fraud. The court granted our motion to dismiss the case.

China

• Representation of an AMEX-traded Chinese company and several of its officers and directors in a securities class action pending in the Central District of California.
• Representation of an NYSE-traded Chinese company in connection with market fallout relating to a change in management and the dismissal of the company's audit firm.
• Representation of an underwriter in a securities fraud class action lawsuit concerning alleged material misstatements in prospectus filed by a China-based issuer listed on a US exchange.
• Representation of a US-listed Chinese company in an SEC investigation.

Other

• Representation of a former accounting firm executive in an SEC enforcement action alleging insider trading.
• Representation of individual defendants in criminal securities fraud cases investigated by the US Attorney alleging insider trading and market manipulation.
• Representation of investment advisors in SEC informal and formal investigations into allegations concerning valuation methodology.
• Representation of a public company in an SEC investigation concerning allegations of fraudulent misstatements concerning the company's products.
• Representation of a private company in an SEC investigation concerning allegations of fraudulent misstatements to potential investors.
• Representation of investment advisors in SEC informal and formal investigations into allegations of improper trading including insider trading and violations of Section 5 of the Securities Act.
• Representation of investment advisors in civil lawsuits alleging violations of Section 16 for short swing trades. We successfully obtained voluntarily dismissals with prejudice for our clients.